Sainsbury. once Britain's leading supermarket chain by sales but now relegated to the number three slot, has continued its revival in the fourth quarter with like-for-like (LFL) sales growth ahead of expectations.
LFL sales in the 10 weeks to March 17th were up 2.5% year-on-year, or 2.6% excluding fuel. That was down from the third quarter growth rate of 4.8% (inc. fuel) but better than the 2.1% growth the market had been expecting.
Total sales for the fourth quarter were up 4.6% (5.1% excluding fuel) on the corresponding period of the previous year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
For the year to date - Sainsbury's financial year runs to the end of March - LFL sales are up 4.5% on the previous year, or 2.1% excluding fuel.
"We have invested over £85m this year to make our fresh food better than ever, and this is delivering real results," trumpeted Sainsbury's Chief Executive, Justin King.
"Sales of basics grew by 10% and Taste the Difference grew by almost 20%," King added, without making it clear whether he was referring to the fourth quarter alone or year-to-date.
The firm's convenience, online and non-food operations are all growing ahead of the market, Sainsbury claimed, while the group also reckons it is gaining market share in clothing and general merchandise, an area where it lags behind its main rivals Tesco and Asda.
"Our convenience business is growing at over 20%, driven by a combination of new space and strong like-for-like sales growth. We are also the fastest growing online grocer. Sales continue to grow at over 20%, with both basket size and order numbers increasing, and we now serve on average 165,000 customers a week," King said.
During the group's fourth quarter it added 170,000 square feet of gross new space, bringing its total gross new space for the year to 1.3m square feet.
"The economic climate is likely to remain challenging," King predicted. "Nonetheless, the Diamond Jubilee, Olympics and Paralympics are wonderful opportunities this year for the country to join together and celebrate, and we expect these to underpin our continued growth as customers trust Sainsbury's to make their celebrations really special," King concluded.
The shares rose 5.8p to 311.3p in the first hour of trading following results.
jh
High earners underestimate how much they need to retire comfortably
Retired banker who gave wife £80m to avoid inheritance tax won’t face equal split in divorce
